Naira opened 6.2% lower against U.S. dollar on the official market on Wednesday as traders quoted the currency close to over-the-counter spot market rate on indications the government would move to conserve dwindling reserves.

In a finance ministry document seen by Reuters on Wednesday, Minister of Finance, Mrs Zainab Ahmed said government would seek to unify exchange rates to generate more naira from its foreign inflows and manage the rate in a sustainable manner.

It would also direct oil firms to sell dollars to central bank as opposed to the state-owned petroleum corporation NNPC, Ahmed said, adding that the government would deregulate petroleum prices as part of measures to safeguard oil revenues.

The policies will be implemented over a 12 month period, the document said.

The naira traded at 385 per dollar on the official market, supported by central bank on Wednesday, before recovering to 361, where it closed on Tuesday, data from Refinitiv Eikon showed.

Central bank did not immediately respond to a request for comment.

Nigeria, Africa’s largest economy, has operated a multiple exchange rate regime used by central bank to manage pressure on the naira. But dollar shortages have plagued the economy after the Coronavirus-induced oil price crash slashed government revenues and weakened the local currency.

The currency has been hitting new lows on the black and over-the-counter spot markets since March after central bank adjusted its official rate, implying a 15% devaluation.

The naira was quoted at 452 on the black market on Wednesday, while the longest five-year currency futures contract quoted it at 578.69.

Reuters